Inc. v. Mumey

          ORDER

          Susan O. Hickey Chief United States District Judge

         Before the Court is Defendant State Farm Mutual Automobile Insurance Company (“State Farm”)'s Motion to Dismiss. (ECF No. 5). Plaintiff Tanner's Truck & Equipment, Inc. filed a response. (ECF No. 13). State Farm filed a reply. (ECF No. 18). The Court finds the matter ripe for consideration.

         I. BACKGROUND ^[1]

         On July 20, 2019, a recreational vehicle (“RV”) owned by Defendant Brian Mumey (“Mumey”) caught fire and became disabled on the Highway 270 bypass near Hot Springs, Arkansas. The Garland County Sheriff's Office contacted Plaintiff to assist with recovery and site remediation. State Farm allegedly confirmed to Plaintiff that Mumey held a State Farm insurance policy covering the RV for hazardous waste removal, remediation, and disposal costs. Plaintiff then removed the RV from the highway, stored the RV's remains pending payment, and provided cleanup and remediation services at the site.

         On July 22, 2019, Plaintiff contacted State Farm again and provided an invoice for services rendered. A State Farm agent allegedly approved the invoice and confirmed coverage for the services listed on the invoice. On August 5, 2019, State Farm requested that Plaintiff separate its invoice into separate categories of “liability” incurred by the RV and “cleanup” of the fuel spill and other hazardous waste. Plaintiff alleges that Mumey subsequently received money from State Farm but refuses to pay for Plaintiff's services.

         On November 4, 2019, Plaintiff filed this action in the Circuit Court of Hot Spring County, Arkansas. Plaintiff seeks $14, 908.44 and accumulated storage costs calculated at $75.00/day. Plaintiff also seeks $50, 000.00 in connection with fraud perpetrated by State Farm, as its statements regarding the availability of coverage on Mumey's RV allegedly induced Plaintiff to perform the cleanup and remediation services. On December 3, 2019, State Farm removed the case to this Court pursuant to 28 U.S.C. § 1332, which allows for removal when there is complete diversity between parties and the amount of controversy exceeds $75, 000.

         On December 3, 2019, State Farm also filed the instant motion to dismiss, seeking dismissal of the fraud claim against it because Plaintiff failed to plead the claim with particularity, as required by Arkansas Rule of Civil Procedure 9(b). Plaintiff opposes the motion.

         II. STANDARD

         A party may move to dismiss for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). The purpose of a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) is to test the legal sufficiency of the complaint, so the court's inquiry is limited to whether the challenged pleadings set forth sufficient allegations to make out the elements of a right to relief. Peck v. Hoff, 660 F.2d 371, 374 (8th Cir. 1981).

         Ordinarily, to survive a motion to dismiss under Rule 12(b)(6), a pleading must provide “a short and plain statement of the claim that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). However, claims sounding in fraud are controlled by the heightened pleading standard of Federal Rule of Civil Procedure 9(b).^[2] Rule 9(b) requires plaintiffs to plead “the circumstances constituting fraud . . . with particularity.” Fed.R.Civ.P. 9(b). To this end, the plaintiff must plead “such matters as the time, place and contents of false representations, as well as the identity of the person making the misrepresentation and what was obtained or given up thereby.” Abels v. Farmers Commodities Corp., 259 F.3d 910, 920 (8th Cir. 2001) (internal citation and quotation omitted). In other words, the party must specify the “who, what, where, when, and how” of the alleged fraud. United States ex rel. Costner v. URS Consultants, Inc., 317 F.3d 883, 888 (8th Cir. 2003). “Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally.” Fed.R.Civ.P. 9(b). However, “[c]onclusory allegations that a defendant's conduct was fraudulent and deceptive are not sufficient to satisfy the rule.” Commercial Prop. Invs. Inc. v. Quality Inns Int'l Inc., 61 F.3d 639, 644 (8th Cir. 1995).

         III. DISCUSSION

         State Farm asserts that Plaintiff fails to state a claim of fraud upon which relief may be granted because it does not allege with particularity that State Farm knew or believed it was making a false statement, an essential element of fraud in Arkansas. Accordingly, State Farm requests that the Court dismiss Plaintiff's complaint.

         In response, Plaintiff states that State Farm represented that Mumey's RV had insurance coverage. Plaintiff argues that State Farm, the issuer of the policy on Mumey's RV, knew or should have known that statement was false because Mumey's policy had a $250.00 limit for debris removal. Plaintiff argues further that State Farm intended to induce Plaintiff to perform hazardous waste removal. In support of these arguments, Plaintiff offers the affidavit of Jason Tanner, Plaintiff's principal operator. (ECF No. 15). In short, the affidavit states that Plaintiff performed the cleanup and remediation services based on the representation of State Farm agents that Mumey's RV had sufficient insurance coverage and that, had Plaintiff been informed that Mumey's policy had a $250.00 limit for debris removal, Plaintiff would not have performed the work.

         In reply, State Farm states that Rule 12(b)(6) motions are ordinarily decided based on the pleadings alone. State Farm argues that the Court should not consider Plaintiff's affidavit and that, looking solely at the four corners ...